You are a senior accountant at a local CPA firm. A client asked you to assist th
ID: 2625192 • Letter: Y
Question
You are a senior accountant at a local CPA firm. A client asked you to assist them on preparing a Statement of Cash Flow. They gave you the following journal entry:
Building 1,000,000
Equipment 250,000
Copyrights 50,000
Cash 1,100,000
Common stock ($1 par) 10,000
Paid-in capital in excess of par 190,000
They want to know how to show the effects of this entry on the Statement of Cash Flow.
Write up a short explanation, (whatever length is appropriate) providing appropriate codification cites along with any other authoritative sources. Give specifics of amounts and any details that the bookkeeper would need to know to show the effects of this entry properly.
Explanation / Answer
Increase in investing activities (buliding, equip, copyright) 1,300,000
Incease in financing activities 200,000
Decrease in cash 1,100,000
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